Nigeria’s total public debt has reached N121.67tn, increasing by N24.33tn or 24.99 per cent within three months, the Debt Management Office has announced.

This new figure is from a total debt of N97.34tn ($108.23bn) as of December 2023.

The DMO in a statement on Thursday said the public debt comprises both the total domestic and external debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory between January and March 2024.

The report read, “Nigeria’s total public debt stood at N121.67tn ($91.46bn) as of March 31, 2024. The comparative figure for December 31, 2023, was N97.34 trillion ($108.23bn). Total Domestic Debt was N65.65tn ($46.29bn) while total external debt was N56.02tn ($42.12bn).”

Our correspondent further observed that the increase is driven majorly by naira depreciation, as the total debt was reduced in dollar terms by $16.77bn or 18.34 per cent.

The office used an official exchange rate of N1,330/$ to convert external debts to naira from N899.39 used to convert the debt in December 2023.

It added that excluding the impact of the naira exchange rate movement in the first quarter of 2024, the domestic debt saw a marked increase to N65.65tn on March 31, 2024, from N59.12tn on December 31, 2023,

The 36 states and FCT also have an external debt of $3.1bn and N4.068tn domestic debt.

The rise is also attributed to a new borrowing undertaken to partly finance the 2024 budget deficit and the securitisation of a portion of the N7.3tn Ways and Means advances at the Central Bank of Nigeria.

The statement added, “Excluding Naira exchange rate movements in Q1 2024, only the Domestic Debt component of Total Public Debt grew from N59.12 trillion on December 31, 2023, to N65.65 trillion on March 31, 2024.

“The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the N7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the Government’s Revenue to enhance debt sustainability.”

It was reported on Thursday that, the government has borrowed a total of $4.95bn in loans from the World Bank in the past 12  months amidst worries about the increasing costs of servicing external debt.

This came as the government still expects fresh loan approval worth $4.4bn from the international lender and the Africa Development Bank over the next year.

An analysis by our correspondent showed that the bank approved funding for six projects including $750m for power sector financing, $500m for women empowerment, $700m for girl child education, $750m for renewable energy solutions, $750m on resource mobilisation reforms and $1.5bn for economic stabilisation reforms.

President Bola Tinubu had expressed his administration’s commitment to breaking the cycle of overreliance on borrowing for public spending and the resultant burden of debt servicing it placed on the management of limited government revenues.

Tinubu recently said the country could not continue to service its debt with 90 per cent of its revenue.

He noted that the country was heading for destruction if that continued.

The President said, “Can we continue to service external debts with 90 per cent of our revenue? It is a path to destruction. It is not sustainable. We must make the very difficult changes necessary for our country to get (wake) up from slumber and be respected among the world’s great nations.

“To build a great nation, we must make bold decisions; even though it may be painful, it is not about you and me. It is about generations yet unborn.”

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has been quite vocal against loans, stating that to stabilise the economy the country would need to rely less on borrowing.

But it remains to be seen if this promise will be kept.

In a document titled, ‘2024: The Hard Road Ahead,’ the Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, highlighted that Nigeria’s debt was becoming unsustainable and the country’s debt burden would be further worsened by high interest rates in 2024.

He said, “Nigeria’s debt is becoming unsustainable. Nigeria serviced its debt with 99 per cent of its revenue in H1’23. Nigeria’s debt burden will be exacerbated by high interest rates in 2024. Efficient use of borrowed funds is crucial for its debt sustainability. The federal government must spend on productive sectors to boost revenue sources.”

He noted that a one per cent increase in public debt will have a 16.7 per cent negative effect on GDP and that if public debt increases to $114.3bn, real GDP growth will fall to 2.12 per cent.

He added, “High debt burden but Nigeria is likely to withstand the shock.”

END.